A Ripple Effect From School Vouchers

September 28, 2000

Nobel Prize winner Milton Friedman, writing in today's Wall Street Journal, asserts that school vouchers would establish a competitive educational industry in the U.S. While he can't predict what the new industry would look like, or what innovations it would spawn, he does know its benefits would far exceed the oft-stated goal of improving education for low-income students in urban areas.

He takes as his model voucher system Proposition 38, which will be on the ballot this fall in California. That proposition provides for a scholarship of $4,000, or half of the average per pupil funding in government schools, whichever is greater. The scholarship will be available to all students in government schools in the first year after the proposition is passed, and will be phased in over four years for students already in private schools.

Here are some of the wider benefits he foresees from vouchers:

Not only would students benefit from higher quality education, but also teachers -- and especially good teachers -- would see a wider market for their services.

Existing private schools would be far more competitive and could use the additional funds to further improve their product, while educational entrepreneurs and their financial backers would have more opportunities.

Since vouchers would cost only half of what government spends in public schools, taxpayers would benefit from the decline in spending.

Employers would benefit from a larger pool of better-schooled potential employees.

Finally, institutions of higher education would benefit as the need for remedial courses for entering students declined.

All of this promises higher productivity and more rapid economic growth -- which, in turn, would narrow the gap between the wages of less-skilled and better-skilled workers.